FINANCIAL STATEMENTS 31 DECEMBER Galp Gás Natural Distribuição, S.A.

Transcription

1 FINANCIAL STATEMENTS 31 DECEMBER 2016 Galp Gás Natural Distribuição, S.A.

2 INDEX STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER 2016 AND 31 DECEMBER INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2016 AND 31 DECEMBER STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2016 AND 31 DECEMBER STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2016 AND 31 DECEMBER STATEMENT OF CASH FLOW FOR THE YEAR ENDED 31 DECEMBER 2016 AND 31 DECEMBER INTRODUCTION SIGNIFICANT ACCOUNTING POLICIES Basis of presentation Foreign currency balances and transactions Income and accrual basis Financial costs on loans obtained Income tax Financial instruments Retirement benefits Other retirement benefits defined contribution minimum benefit Financial instruments Classification in the statement of financial position Subsequent events Estimates and judgments COMPANIES INCLUDED IN CONSOLIDATION FINANCIAL INVESTMENTS Financial investments in subsidiaries and joint-venture Investments in associates OPERATING INCOME OPERATING COSTS SEGMENT REPORTING FINANCIAL INCOME AND COSTS INCOME TAXES EARNINGS PER SHARE GOODWILL INTANGIBLE ASSETS GOVERNMENT GRANTS OTHER RECEIVABLES TRADE RECEIVABLES INVENTORIES OTHER FINANCIAL INVESTMENTS CASH AND CASH EQUIVALENTS SHARE CAPITAL OTHER RESERVES NON-CONTROLLING INTERESTS LOANS POST-EMPLOYMENT AND OTHER EMPLOYEE BENEFITS... 27

3 24. OTHER PAYABLES PROVISIONS TRADE PAYABLES OTHER FINANCIAL INSTRUMENTS FINANCIAL DERIVATIVES RELATED PARTIES REMUNERATION OF THE BOARD DIVIDENDS OIL AND GAS RESERVES FINANCIAL RISK MANAGEMENT CONTINGENT ASSETS AND LIABILITIES INFORMATION ON ENVIRONMENTAL MATTERS SUBSEQUENT EVENTS APPROVAL OF THE FINANCIAL STATEMENTS EXPLANATION ADDED FOR TRANSLATION... 36

4 STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER 2016 AND 31 DECEMBER 2015 Galp Gás Natural Distribuição, S.A. (Amounts stated in Euro) ASSETS Notes Non-current assets: Intangible assets , Financial investments in subsidiary 4 163,148, ,90 Financial investments in associates 4 17,807, ,32 Other receivables ,484, ,20 Deferred tax assets ,65 Total non-current assets: 726,702, ,07 Current assets: Trade receivables 15 4,488, ,55 Other receivables 14 7,941, ,17 Cash and cash equivalents 18 34,194, Total current assets: 46,624, ,72 Total assets: 773,327, ,79 EQUITY AND LIABILITIES Notes Equity: Share capital 19 89,529, ,00 Other reserves 20 3,434, ,80 Retained earnings remeasurement (603.72) Retained earnings ,99 Net result for the year 65,217, ,08 Total equity attributable to shareholders: 158,179, ,87 Total equity: 158,179, ,87 Liabilities: Non-current liabilities: Bank loans ,490, Other payables ,19 Post-employment and other employee benefits 23 4, ,00 Total non-current liabilities: 595,494, ,19 Current liabilities: Short-term bank loans and other loans ,73 Trade payables 26 1,301, ,38 Other payables 24 17,002, ,51 Current income tax payable 9 1,348, ,11 Total current liabilities: 19,653, ,73 Total liabilities: 615,147, ,92 Total equity and liabilities: 773,327, ,79 The accompanying notes form an integral part of the statement of financial position as of 31 December Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

5 INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2016 AND 31 DECEMBER 2015 Galp Gás Natural Distribuição, S.A. (Amounts stated in Euro) Notes Operating income: Services rendered 5 11,482, ,006, Other operating income Total operating income: 11,482, ,006, Operating costs: External supplies and services 6 (4,940,722.05) (2,013,768.18) Personnel costs 6 (6,029,269.87) (6,609,549.59) Other operating costs 6 (163.81) (190.62) Total operating costs: (10,970, (8,623, Operating results: 512, , Financial income 8 27,745, ,498, Financial costs 8 (23,259,459.74) (30,181,728.46) Financial investments gains/(losses) associates, affiliates and 4 61,527, ,704, related companies Result before taxes: 66,526, ,404, Income tax 9 (1,309,336.12) 565, Net result for the year 65,217, ,969, The accompanying notes form an integral part of the income statement for the year ended 31 December Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

6 STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2016 AND 31 DECEMBER 2015 Galp Gás Natural Distribuição, S.A. (Amounts stated in Euro) Notes Net result for the year 65,217, ,969, Other comprehensive income for the year which will not be recycled in the future for net result of the year: Remeasurement 23 (779.00) Remeasurement tax (603.72) Gains and Losses recognised in Equity net of taxes 65,216, ,969, Total comprehensive income for the year 65,216, ,969, The accompanying notes form an integral part of the statement of comprehensive income for the year ended 31 December Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

7 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2016 AND 31 DECEMBER 2015 Galp Gás Natural Distribuição, S.A. (Amounts stated in Euro) Changes in the period Notes Share Capital (Note 19) Share Premium Other Reserves (Note 20) Actuarial Gains and Losses Retained Earnings Total Balance as of 1 January ,529, , (81,773.35) 59,714, ,261, Net result for the year 8,969, ,969, Share premium (100,000.00) (100,000.00) Comprehensive income for the year (100,000.00) 8,969, ,869, Increase/decrease of reserves by appropriation of profit 2,985, (56,646,260.88) (53,660,533.08) Constitution/deliver of share premium 56,728, (59,714,556) (2,985,728) Balance as of 31 December ,529, ,985, ,969, ,485, Balance as of 1 January ,529, ,985, ,969, ,485, Net result for the year 65,217, ,217, Other Gains and Losses recognised in Equity (603.72) (603.72) Comprehensive income for the year (603.72) 65,217, ,216, Dividends distributed / Interim dividends 30 (8,521,920.82) (8,521,920.82) Increase of reserves by appropriation of profit 448, ,521, (8,969,636.08) Balance as of 31 December ,529, ,434, (576.27) 65,217, ,179, The accompanying notes form an integral part of the statement of changes in equity for the year ended 31 December Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

8 STATEMENT OF CASH FLOW FOR THE YEAR ENDED 31 DECEMBER 2016 AND 31 DECEMBER 2015 Galp Gás Natural Distribuição, S.A. (Amounts stated in Euro) Notes Operating activities: Cash received from customers 15,415, ,799, Cash payments to suppliers (10,992,363.29) (5,681,315.48) Payments relating to employees (105,063.88) (44,568.87) (Payments)/ Receipts of income taxes (328,967.85) (48.61) Contributions to the pension fund 23 (3,797.93) Other (payments)/ Receipts relating to the operational activity (1,413,203.27) (981,862.03) Cash flows from operating activities (1) 2,571, ,091, Investing activities: Receipts from: Interests and similar income 22,876, ,949, Dividends 4 61,527, ,704, Loans obtained 21,323, ,227, ,727, ,880, Payments relating: Financial investments (30,717.00) (86,955,374.31) Tangible assets (239,321.99) Loans obtained (6,193,541.75) (83,753,931.73) (6,463,580.74) (170,709,306. Cash flows from investing activities (2) 99,264, (95,828,552.9 Financing activities: Receipts from: Loans obtained 601,247, ,396, Increase of share capital, share premium and issue premium 1,104, Interest and similar income 145, ,247, ,645,267.3 Payments relating: Loans obtained (633,406,575.61) (60,703,860.66) Interests from loans obtained (26,735,627.12) (29,646,866.24) Dividends distributed 30 (8,521,920.82) (57,850,260.88) (668,664,123.5 (148,200,987. Cash flows from financing activities (3) (67,416,549.27) 92,444, Net change in cash and cash equivalents (4) = (1) + (2) + (3) 34,419, (292,595.04) Cash and cash equivalents at the beginning of the year 18 (225,645.73) 66, Cash and cash equivalents at the end of the year 18 34,194, (225,645.73) The accompanying notes form an integral part of the statement of cash flow for the year ended 31 December Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

9 1. INTRODUCTION Galp Gás Natural Distribuição, S.A. ( Company ) has its Head Office in Lisbon and was constituted in 2 December 2009 under the company Galp Gás Natural Distribuição, SGPS, S.A., with the corporate business of managing other companies shares. At April 1st 2015, by unanimous deliberation of the sole shareholder GDP Gás de Portugal, S.G.P.S., S.A., the Company changed its social name to the current one, Galp Gás Natural Distribuição, S.A., becoming its corporate business activities in the energy sector, particularly related to natural gas, including services rendering to business support, in management, administration and logistics, purchases and supply and information systems. Its Head Office is in Lisbon, Tomás da Fonseca Torre C 1, Lisbon. During the year ended 31 December 2016, the Company changed its shareholder structure and the position as of 31 December 2016 is detailed in Note 19. Financial Statements are presented in Euro (functional currency), given that it is the currency preferably used in the economic environment in which the Company operates. 2. SIGNIFICANT ACCOUNTING POLICIES The accounting policies used by the Company to prepare the financial statements are explained below Basis of presentation Company s financial statements were prepared on a going concern basis, at historical cost, except for financial derivative instruments which are stated at fair value on the accounting records of the Company maintained in accordance with International Financial Reporting Standards as adopted by the European Union, effective for the economic exercise beginning in 1 January These standards include International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board ( IASB ) and International Accounting Standards ( IAS ) issued by the International Accounting Standards Committee ( IASC ) and respective interpretations SIC and IFRIC, issued by the International Financial Reporting Interpretation Committee ( IFRIC ) and Standing Interpretation Committee ( SIC ). These standards and interpretations are hereinafter referred to as IFRS. The IFRS standards published by International Accounting Standard Board (IASB) and approved and published in the Official Journal of the European Union ( OJEU ) during 2016, applicable to subsequent years are presented in the tables below: Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

10 Standards and Interpretations published by IASB and not yet approved by the EU: IAS Standard Publishing date in IASB Date of accounting application Year to which it applies Comments IFRS 14 Regulatory Tariff Deviations 30/JAN/2014 no estimated date - Not applicable IFRS 16 Leases 13/JAN/2016 2nd Semester Impact of the application of the standard still to be determined Amendments to IAS 12 Income Taxes 19/JAN/2016 2nd Quarter No estimated impact Amendments to IAS 7 Statement of Cash Flow 29/JAN/2016 2nd Quarter Clarification of IFRS 15 Revenue from contracts with customers 12/ABR/2016 2nd Quarter Impact on disclosures in the notes to the financial statements Impact of the application of the standard still to be determined Amendments to IFRS 2 Share based payments 20/JUN/2016 2nd Semester Not applicable Amendments to IFRS 4 Insurance Contracts 12/SET/ Not applicable IFRS annual Improvements cycle /DEZ/2016 2nd Semester /2018 No relevant accounting impacts IFRIC 22 Foreign Currency Transactions and Advance Consideration 08/DEZ/2016 2nd Semester No estimated impact Amendments to IAS 40 Investment Properties 08/DEZ/2016 2nd Semester No estimated impact The IAS/IFRS standards approved and published in the Official Journal of the European Union ( OJEU ) during 2016, applicable to present and subsequent years are presented in the table below: Standards and Interpretations approved by the EU and applicable to subsequent years, if applicable: IAS Standard IFRS 9 Financial Instruments IFRS 15 Revenue from contracts with customers Publishing date in OJEU Date of accounting application Year to which it applies 29/NOV/ /JAN/ Comments Impact on the derivative financial instruments, classified in accordance with accounting standards as hedging and in the calculation of the impairment losses on accounts receivable 29/OUT/ /JAN/ Impact, still to be determined, on the revenue recognition Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

11 The IAS/IFRS standards approved and published in the Official Journal of the European Union ( OJEU ) during 2015 and 2016, applicable in 2016 and subsequent years are presented in the table below: Standards and Interpretations adopted, if applicable: IAS Standard Publishing date in OJEU Date of accounting application Year to which it Applies Comments Amendments to IFRS 10, 12 and IAS 28 - Investment entities: applying consolidation exception Amendments to IAS 27 Separate Financial Statements 23/SET/ /JAN/ Not applicable 23/DEZ/ /JAN/ No impact Amendments to IAS 1 Presentation of Financial Statements IFRS annual improvements cycle /DEZ/ /JAN/ /DEZ/ /JAN/ No relevant accounting impacts No relevant accounting impacts Amendments to IAS 16 Tangible Fixed Assets and IAS 38 Intangible Assets 03/DEZ/ /JAN/ Not applicable Amendments to IFRS 11 Joint arrangements 25/NOV/ /JAN/ Potential impact on new acquisitions of joint operations Amendments to IAS 16 Tangible Fixed Assets and IAS 41 Agriculture 25/NOV/ /JAN/ Not applicable IFRS annual improvements cycle /JAN/ /FEV/ No relevant accounting impacts Amendments to IAS 19 Defined Benefits Plan: Employees contributions 09/JAN/ /FEV/ No impact In the preparation of the financial statements were used estimates that affect the amounts of assets, liabilities, income and costs were used in preparing the accompanying consolidated financial statements. The estimates and assumptions used by the Board of Directors were based on the best information available regarding events and transactions in process at the time of approval of the financial statements. The Company, for the elaboration and presentation of the financial statements, declares to be, explicitly and completely, according with the IAS/IFRS standards and respective interpretations SIC/IFRIC, approved by the European Union Foreign currency balances and transactions Transactions are recorded in the separate financial statements of subsidiaries in their functional currencies, at the exchange rates in force on the dates of the transactions. Gains and losses resulting from differences in exchange rates in force on the dates of the transactions and those prevailing at the date of collection, payment or at the end of the reporting period are recorded as income and expenses, respectively, in the income statement caption Exchange gain / (loss), except for those relating to non-monetary items, that are recorded directly in equity. Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

12 2.3. Income and accrual basis Expenses and revenues are recorded in the corresponding period, independently of the date of payment or receipt. Expenses and revenues for whose real amount is unknown, Company uses estimations. Under the captions Other current assets and Other current liabilities are recorded expenses and revenues of the current period and which receipt and payment will only occur in future periods, as well as receipts and payments already occurred but related to future periods and that are assigned to each periods income Financial costs on loans obtained Financial costs on loans obtained are recorded as financial costs on an accruals basis Income tax Income tax is calculated based on the taxable results of the Company in accordance with the applicable tax rules in force in Portugal. Deferred taxes are calculated based on the liability method and reflect the temporary differences between the amounts of assets and liabilities recorded for accounting purposes and their amounts for tax purposes. Deferred tax assets and liabilities are calculated and reviewed annually using the tax rates expected to be in force when the temporary differences revert. Deferred tax assets are recorded only when there is reasonable expectation of sufficient future taxable income to use them or whenever there are taxable temporary differences that offset the deductible temporary differences in the period they revert. Temporary differences underlying deferred tax assets are reviewed at each statement of financial position date in order to recognise deferred tax assets that were not recorded in prior years as they did not fulfil all requisites and/or to reduce the amounts of deferred tax assets recorded based on the current expectation of their future recovery (Note 9). Deferred taxes are recorded in the income statement for the year, unless they result from items recorded directly in equity, in which case the deferred tax is also recorded in equity Financial instruments Financial investments are accounted for at acquisition cost, deducted from impairment losses Retirement benefits The Company has assumed the commitment to pay their employees pension supplements for retirement due to age and pensions to survivors, in the exceeding part of social security contributions. Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

13 At the end of each reporting period the Company obtains actuarial valuations by a specialised entity in accordance with the Projected Unit Credit Method and compare the amount of their liabilities with past services with the market value of the funds and with the balance of the liabilities recognised, in order to determine any additional liabilities that need to be recorded (Note 23). Actuarial gains and losses determined in each year and for each of the benefits granted, resulting from adjustments to the demographic assumptions, experience adjustments, are recorded in the statement of comprehensive income impacting the financial position Other retirement benefits defined contribution minimum benefit The Company s costs with respect to defined contribution minimum benefit plan are recognised over the period the employees entitled to these benefits are in service of the respective companies, the liability being reflected in the statement of financial position caption Post-employment and other employee benefits liabilities (Note 23). Payments to the beneficiaries are deducted from the liability. At the end of each reporting period the Company obtains actuarial valuations calculated by a specialised entity in accordance with the Projected Unit Credit Method and compares the amount of their liabilities with the market value of the funds and with the balance of the liabilities, in order to determine the additional liabilities to be recorded. Actuarial gains and losses determined in each year and for each of the benefits granted, resulting from adjustments to the demographic assumptions, experience adjustments, are recorded in the statement of comprehensive income impacting the financial position Financial instruments Financial assets and liabilities are recorded in the statement of financial position when the Company becomes a contractual part of the financial instrument. a) Investments Investments are classified as follow: Held-to-maturity investments; Investments at fair value through profit and loss; Available-for-sale investments. Held-to-maturity investments are classified as non-current investments, unless they mature in less than 12 months from the consolidated statement of financial position date, being recorded under this caption investments which have a defined maturity date and that the Group intends and has the ability to retain them up to their maturity. Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

14 Investments at fair value through profit or loss are classified as current investments. Available-for-sale investments are classified as non-current assets. All purchases and sales of these investments are recorded on the date of the signature of the respective purchase and sale contracts, independently of the financial settlement date. Investments are initially recorded at cost, which is the fair value of the price paid, including transaction costs. After initial recognition, investments at fair value through profit or loss and available-for-sale investments are revalued to fair value by reference to their market value at the financial statements date, with no deduction for transaction costs which could be incurred upon sale. For equity instruments not listed on a regulated market, where it is not possible to reliably estimate their fair value, these are maintained at cost less any non-reversible impairment losses. Gains and losses resulting from changes in the fair value of available-for-sale investments are recognized in the equity caption Fair value reserve until the investment is sold, redeemed or in some way disposed of, or until the fair value of the investment falls below cost over a long period, at which time the accumulated gain or loss is recorded in the income statement. Gains and losses resulting from changes in the fair value of investments at fair value through profit or loss are recorded in the income statement. Held-to-maturity investments are recorded at amortized cost using the effective interest rate, net of repayments of principal and interest received. b) Receivables Receivables are recorded at fair value. At each financial statements date, the amount is deducted of impairment losses, which are recognised under Impairment losses on receivables, so that it reflects its net realisable value. Usually, receivables arising from operating activity do not bear interests. c) Equity and liability classification Financial liabilities and equity instruments are classified in accordance with substance of the contractual arrangement, independent of their legal form. d) Loans Loans are recorded as liabilities at their nominal received amount, net of issuance expenses pertaining to those loans. Financial costs are calculated at the effective interest rate and recognised in the income statement on an accrual basis. Financial costs include interest and any origination fees incurred relating to project finance. Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

15 e) Trade and other payable Accounts payable are recorded at amortised cost. Usually amortised cost of such liabilities does not differ from its nominal value. f) Cash and cash equivalents The amounts included in the caption Cash and cash equivalents includes cash, bank deposits, term deposits and other treasury applications that mature in less than three months, and that can be realised immediately with insignificant risk of change in their value. For cash flow statement purposes the caption Cash and cash equivalents also includes bank overdrafts included in the statement of financial position caption Bank loans and overdrafts Classification in the statement of financial position Assets realisable and liabilities payable in more than one year from the financial statements date are classified as non-current assets and non-current liabilities, respectively Subsequent events Events that occur after the financial statements date that provide additional information on conditions that existed at the end of the reporting period are recorded, if material, in the financial statements Estimates and judgments The preparation of financial statements in accordance with generally accepted accounting principles requires estimates to be made that affect the recorded amount of assets and liabilities, the disclosure of contingent assets and liabilities at the end of each year and income and costs recognised each year. The actual results could be different depending on the current estimates made. Certain estimates are considered critical if: (i) the nature of the estimates is considered to be significant due to the level of subjectivity and judgment required to record situations in which there is great uncertainty or are very susceptible to changes in the situation and; (ii) the impact of the estimates on the financial situation or operating performance is significant. Provision for contingencies The final cost of lawsuits, settlements and other litigation can vary due to estimates based on different interpretations of the rules, opinions and final assessment of the losses. Consequently, any change in circumstances relating to these types of contingency can have a significant effect on the recorded amount of the provision for contingencies. Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

16 3. COMPANIES INCLUDED IN CONSOLIDATION Not applicable. 4. FINANCIAL INVESTMENTS 4.1. Financial investments in subsidiaries and joint-venture Financial investments hold by the Company as of 31 December 2016 and 31 December 2015, were as following: Percentage of interest Head Office held City Country Main activity Book Value Subsidiary Companies: Beiragás - Companhia de Gás das Beiras, S.A. Viseu Portugal 59.60% 59.51% Dianagás - Soc. Distrib. de Gás Natural de Évora, S.A. Lisboa Portugal % % Operation, construction and maintenance of local natural gas distribution network. Operation, construction and maintenance of local natural gas distribution network. 20,293, , Duriensegás - Soc. Distrib. de Gás Natural do Douro, S.A. Vila Real Portugal % % Operation, construction and maintenance of local natural gas distribution network. 6,765, Lisboagás GDL - Sociedade Distribuidora de Gás Lisboa Portugal % % Natural de Lisboa, S.A. Lusitaniagás - Companhia de Gás do Centro, S.A. Aveiro Portugal 96.84% 96.84% Operation, construction and maintenance of local natural gas distribution network. Operation, construction and maintenance of local natural gas distribution network. 47,285, ,295, Medigás - Soc. Distrib. de Gás Natural do Algarve, S.A. Lisboa Portugal % % Operation, construction and maintenance of local natural gas distribution network. 1,072, Paxgás - Soc. Distrib. de Gás Natural de Beja, S.A. Lisboa Portugal % % Operation, construction and maintenance of local natural gas distribution network. 994, Setgás-Sociedade de Distribuição de Gás Natural, S.A. Setúbal Portugal 99.93% 66.88% Operation, construction and maintenance of local natural gas distribution network. 59,454, ,148, Financial investments impairment 163,148, Subsidiary s Financial Information Total Assets Total Liabilities Equity Net result of the year % Amount % Amount Subsidiary Companies: Beiragás, S.A. 81,990, ,327, ,662, ,213, ,60% ,64 59,51% ,58 Dianagás, S.A. 15,477, ,160, ,316, , ,00% ,08 100,00% ,79 Duriensegás, S.A. 41,819, ,084, ,735, , ,00% ,07 100,00% ,50 Lisboagás GDL, S.A. 600,194, ,670, ,524, ,312, ,00% ,88 100,00% ,80 Lusitaniagás, S.A. 310,955, ,453, ,501, ,084, ,84% ,61 96,84% ,11 Medigás, S.A. 20,564, ,186, ,378, , ,00% ,69 100,00% ,45 Paxgás, S.A. 6,703, ,540, ,162, , ,00% ,98 100,00% ,59 Setgás, S.A. 174,888, ,854, ,033, ,063, ,93% ,53 66,88% ,94 1,252,593, ,278, ,315, ,259, , ,76 Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

17 During the years ended 31 December 2016 and 2015, the movement of the caption Financial investments gains / (losses) - associates, affiliates and related companies, were as follows: Dividends: Subsidiary companies: Lusitaniagás - Companhia de Gás do Centro, S.A. 6,895, ,440, Lisboagás GDL - Sociedade Distribuidora de Gás Natural de Lisboa, S.A. 5,500, ,000, Beiragás - Companhia de Gás das Beiras, S.A. 1,190, Dianagás - Soc. Distrib. de Gás Natural de Évora, S.A. 1,153, Medigás - Soc. Distrib. de Gás Natural do Algarve, S.A. 449, , Paxgás - Soc. Distrib. de Gás Natural de Beja, S.A. 107, Setgás - Sociedade de Produção e Distribuição de Gás, S.A. 44,970, Duriensegás - Soc. Distrib. de Gás Natural do Douro, S.A. 1,261, , ,527, ,704, Investments in associates Investments in associates, their head offices and the percentage or interest held as of 31 December 2015 and 2014 are as follows: Percentage of interest Head Office held Companies City Country Book Value Associated companies: Tagusgás-Empresa de Gás do Vale do Tejo, S.A. Cartaxo Portugal 41.33% 41.33% 17,807, ,807, December Head Net % Amount % Amount Office Equity Result Tagusgás-Empresa de Gás do Vale do Santarém , , % 15,059, % 14,248, ,059, ,248, OPERATING INCOME During the years ended at 31 December 2016 and 2015, the Company, besides financial investments management, also rendered services to subsidiary companies, amounting 11,482, Euro and 9,006, Euro, respectively (Note 28). Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

18 6. OPERATING COSTS As of 31 December 2016 and 2015, operating costs presents the following detail: CAPTIONS External supplies and services Other specialised services 3,126, , Other costs 282, , Marketing and Communication 277, , IT Services 245, , Travel and accommodation 221, , Rental costs 219, , Communication 155, , Legal services 143, , Fuel 106, , Insurance 51, , Studies and projects 40, , Salaries 35, , Representational expenses 12, Office materials 7, , Gifts 4, , Maintenance and repairs 3, , Surveillance and Security 3, , Litigation and notary 2, , Technical documentation and books , Tools Cleaning, hygiene and comfort Personnel assigned from other companies 247, Publicity Personnel transportation ,940, ,013, Personnel costs Employee salaries 5,690, ,502, Social charges 43, , Retirement benefits - pensions and insurance (Note 23) 5, , Other insurances 11, , Other costs 144, , ,029, ,609, Other operating costs Other taxes Other operating costs ,970, ,623, Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

19 7. SEGMENT REPORTING Not applicable. 8. FINANCIAL INCOME AND COSTS Financial income and financial costs for the years ended 31 December 2016 and 2015 are as follows: CAPTIONS Financial income: Interest with related companies (Note 28) 27,745, ,498, Interest Others ,745, ,498, Financial costs: Interest with related companies (Note 28) (20,716,822.62) (30,170,891.95) Other interests (2,315,406.74) Interest net of retirement benefits and other benefits (Note 23) (47.00) Commissions (227,183.38) (10,836.51) (23,259,459.74) (30,181,728.46) 9. INCOME TAXES Since 31 December 2000, the Company is taxed in accordance with the special regime for the taxation of groups of companies, with taxable income being determined in Galp Energia, S.G.P.S., S.A.. However, estimated income tax of the Company is accounted based on its tax results, which at 31 December 2016 and 31 December 2015 represents a payable income tax to Galp Energia, S.G.P.S., S.A., amounting to 1,348, Euro and 401, Euro, respectively, and was calculated as follows: CAPTIONS Current tax 1,382, (509,621.30) (Excess)/Insufficiency of income tax for the preceding years (55,291.87) 2014 tax 966, Tax withholding (33,540.00) 1,348, , In accordance with current Portuguese legislation, corporate income tax returns are subject to review and correction by the tax authorities for a period of four years (five years for Social Security). Therefore, tax returns concerning the years from 2013 to 2016 can still be subject to review. The Board of Directors understands that corrections arising from revisions/inspections by fiscal authorities to those tax returns will not have a significate impact over the financial statement as of 31 December 2016 and Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

20 Recognised income tax for the year ended 31 December 2016 and 2015 are as follows: CAPTIONS Current income tax 1,382, (509,621.30) (Excess)/Insufficiency of income tax for the preceding years (72,820.65) (55,291.87) Corrections from preceding years (333.90) (421.65) 1,309, (565,334.82) Below is a reconciliation of the income tax for the years ended 31 December 2016 and 2015: 2016 Rate Income tax 2015 Rate Income Tax Result before taxes: 66,526, % 13,970, ,404, % 1,764, Adjustments to taxable income: Received dividends (19.42)% (12,920,803.86) (29.25)% (2,457,945.00) (Excess)/Insufficiency of income tax of the preceding year (0.11)% (72,820.65) (0.66)% (55,291.87) Local State Tax 0.16% 105, Municipal Tax 0.11% 75, Autonomous taxation 0.23% 152, % 183, Other accruals and deductions (2.43) Income tax and rate 1.97% 1,309, (6.73)% (565,334.82) Deferred Taxes As of 31 December 2016, the balance of deferred tax assets and liabilities is as follows: Assets Retirement benefits 930,83 421,65 930,83 421,65 Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

21 The changes in the caption Deferred taxes in the years 2016 and 2015 are justified as follows: Assets Initial Balance Effect in results: Retirement benefits Effect in Equity: Retirement benefits Final Balance EARNINGS PER SHARE Earnings per share for the years ended 31 December 2016 and 2015 are as follows: Results: Net result for purposes of calculating earnings per share (net result of the period) 65,217, ,969, Number of shares Weighted average number of shares for purposes of calculation earnings per share (Note 19) 89,529,141 89,529,141 Basic earnings per share (amounts stated in Euro): The diluted earnings per share are equal to basic earnings per share, since there are no situations that give rise to dilution. 11. GOODWILL Not applicable. Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

22 12. INTANGIBLE ASSETS The changes in the caption in the year ended in 31 December 2016 are justified as follows: Intangible assets 2016 Intangible assets in progress Total intangible assets Acquisition costs: Balance at 1 January 2016 Additions 260, , Balance at 31 December , , GOVERNMENT GRANTS Not applicable. Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

23 14. OTHER RECEIVABLES The non-current and current caption Other receivables as of 31 December 2016 and 31 December 2015 is detailed as follows: Captions Current Non-current Current Non-current Loans to associates, joint ventures and other related parties (Note 28) 6,217, ,483, , ,249, Advances to suppliers 12, Personnel Other receivables 39, ,270, ,483, , ,249, Accrued income: Accrued interest (Note 28) 1,153, ,208, Other accrued income (Note 28) 463, ,153, ,671, Deferred charges: Prepaid insurance 12, Other deferred costs 504, , ,941, ,484, ,817, ,249, Impairment of other receivables 7,941, ,484, ,817, ,249, Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

24 15. TRADE RECEIVABLES As of 31 December 2016 and 2015, this caption includes amounts related to other group companies (Note 28) CAPTIONS Current Trade receivables current account (Note 28) 4,488, ,363, ,488, ,363, INVENTORIES Not applicable. 17. OTHER FINANCIAL INVESTMENTS Not applicable. 18. CASH AND CASH EQUIVALENTS As of 31 December 2016 and 2015, the caption Cash and cash equivalents presented the following detail: Cash Deposits 34,194, Cash and cash equivalents in the statement of financial position 34,194, Bank overdrafts (Note 22) (225,645.73) Cash and cash equivalents in the statement of cash flow 34,194, (225,646.73) 19. SHARE CAPITAL Capital Structure As of 31 December 2016, the Company s share capital, amounting 89,529, Euro, is represented by 89,529,141 shares with a nominal value of 1.00 Euro each and entirely subscripted and realised by: Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

25 2016 Shareholders No of shares Participation (%) Imputable participation % Galp Gás & Power, S.G.P.S., S.A. 69,385, % 77.50% Meet Europe Natural Gas, Lda. 20,144, % 22.50% 89,529, % % Shareholders 2015 No of shares Participation (%) Imputable participation % Galp Gás & Power, S.G.P.S., S.A. 89,529, % % 89,529, % % 20. OTHER RESERVES According to the company s statute and the Commercial Companies Code, the company has to transfer to the caption Legal Reserves, included in other reserves, in share capital, a minimum of 5% of the net profit for each year up to a limit of 20% of the share capital. Legal reserves can t be distributed to shareholders, whichever, under certain circumstances, it may be used to increase share capital or absorb losses after all other reserves are exhausted. As of 31 December 2016 and 2015, the caption is detailed as follows: Legal Reserves 3,434, ,985, ,434, ,985, NON-CONTROLLING INTERESTS Not applicable. Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

26 Financial statements and notes to the consolidated financial statements as of 31 december LOANS Detail of loans Loans obtained as of 31 December 2016 and 31 December 2015 were as follows: Non-Current Current Bank loans: Bank overdrafts (Note 18) , ,73 Bond loans: Notes , ,00 Origination Fees ( ,14) , , ,73 Notes Issuance Galp Gás Natural Distribuição, S.A. At August 25th 2016, Galp Gás Natural Distribuição, S.A. established an EMTN Programme ( EUR 1,000,000,000 Euro Medium Term Note Programme ). Under the EMTN Programme, at September 19th 2016, Galp Gás Natural Distribuição, S.A., issued notes amounting 600,000 k, which overdue at September 19th 2023, with coupons of 1.375%, admitted to negotiation on the regulated market of London Stock Exchange. JP Morgan, BofA Merrill Lynch and Banco Santander Totta acted as Joint-Bookrunners in this transaction. Under the program (EMTN), a set of Financial Covenants were defined in order increase the protection of GGND Group s creditors. Such covenants - Net Debt/EBITDA (ND/E) and Debt Service Coverage Ratio (DSCR) have two limits one in lock-up event and other in event of default: Financial Covenants December 2016 Net Debt / EBITDA 5.3x Debt Service Coverage Ratio 2.1x As of 31 December 2016 the mentioned covenants are in compliance. Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

27 23. POST-EMPLOYMENT AND OTHER EMPLOYEE BENEFITS Other retirement benefits - life insurance and minimum benefit defined contribution plan (disability and survival) As mentioned in Note 2.7 and 2.8, the Company has registered at 31 December 2016 a provision to cover its liability for the minimum benefit defined contribution plan. The current value of liabilities for past services and actuarial assumptions used in their calculation is as follows: Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

28 Defined contribution plan minimum benefit Defined contribution plan minimum benefit Assumptions Technical interest rate 2,50% 2,50% Rate of increase in salaries 1.00% 1.00% Rate of increase in pensions 0.00% 0.00% Current personnel and pre-retirees mortality table INE INE Retired personnel mortality table GKF95 GKF95 Disability table EVK 80-50% EVK 80-50% Common age for retirement 66 years or 65 years if at least with 43 years of discounts to S.S. at years or 65 years if at least with 43 years of discounts to S.S. at 65 Method Projected credit unit Projected credit unit Changes in past service liability (PSL) PSL at the end of the previous year 1, Current service cost 1, Interest cost Actuarial (gain) / loss Other adjustments - 1, PSL at the end of the current year 4, , Reconciliation to the Statement of Financial Position (Gains) / losses recognized at the beginning of the year - Asset/(Liability) (1,874.00) - Net cost of the year (1,484.00) (1,874.00) Gains / (losses) recognized through Comprehensive Income (779.00) - Total recognized at year end - Assets / (Liabilities) (4,137.00) (1,874.00) Net cost of the year Current service cost - - Interest cost - - Other adjustments 138, , Net cost of the year 138, Reconciliation of gains and loss recognized- through Comprehensive Income Cumulative (Gains) / losses recognized at the beginning of the year - - Changes in the "asset ceiling" effect (Gains) / losses from actuarial experience (1,074.00) - Cumulative (Gains) / losses recognized at the end of the year (779.00) - Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

29 The amount of 5, Euro under Personnel costs in the income statement (note 6) is detailed as follows: (i) current service costs in a total amount of 1, Euro e (ii) 3, Euro related to benefit defined contribution. Interest cost, in a total amount of 47.00, was recorded by the Company under Other interest in the income statement (Nota 8). Sensitivity analysis A sensitivity analysis was performed in order to measure the impact on liabilities caused by a change in the discount rate. For this purpose a negative variation of 25 b.p. in the discount rate was considered: Liabilities Discount Rate 2.25% Discount Rate Variation Other benefits: Defined contribution plan minimum benefit 4,137 4, % The sensitivity analysis performed, demonstrates that a 1% increase in the discount rate, ceteris paribus, implies the followed decrease in past service liabilities: Liabilities Percentage Other benefits: Defined contribution plan minimum benefit (6.57) A sensitivity analysis was performed in order to measure the impact on liabilities caused by a change in the salary/pension growth. For this purpose a positive variation of 100 b.p. in the salary/pension growth was considered: Liabilities Rate 1% Rate 2% Variation Other benefits: Defined contribution plan minimum benefit 4,137 4, % Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

30 24. OTHER PAYABLES As of 31 December 2016 and 2015 the caption Other payables is detailed as following: Captions Current Current Non-Current State and other public entities: Value Added Tax payable 996, , Income Tax Withheld to third parties 10, Social Security 26, , Loans - Associates, affiliates and related companies (Note 28) 10,737, ,096, ,800, Personnel 1, ,772, ,499, ,800, Accrued costs: External supplies and services 2,086, ,311, External supplies and services (Note 28) 177, Accrued interest 2,314, ,299, Holiday, holiday subsidy and corresponding contributions 76, , Productivity bonuses (Note 28) 543, , Productivity bonuses 22, , Short and long-term incentives 131, Accrued insurance premiums 9, , ,230, ,460, , ,002, ,960, ,931, PROVISIONS Not applicable. 26. TRADE PAYABLES As of 31 December 2015 and 31 December 2014 the caption Trade payables was detailed as follows: Captions Trade payables current accounts 1,160, ,294, Trade payables pending invoices 141, , ,301, ,350, OTHER FINANCIAL INSTRUMENTS FINANCIAL DERIVATIVES Not applicable. Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

31 28. RELATED PARTIES Balances and transactions with related parties in 31 December 2016 and 2015 were as follows: Receivables 2016 Non-Current Current Companies Total Related Parties Granted Loans (Note 14) Trade Receivables (Note 15) Granted Loans (Note 14) Accruals and Deferrals Lisboagás GDL, S.A. Lusitaniagás, S.A. Setgás, S.A. Duriensegás, S.A. Medigás, S.A. Dianagás, S.A. Tagusgás, S.A. Paxgás, S.A. Beiragás, S.A. Galp Energia, SGPS, S.A. 255,852, ,165, ,151, , ,300, ,626, , ,876, , ,281, ,609, , ,240, , ,674, ,505, , , ,457, ,330, , , ,503, ,212, , , , ,359, ,374, ,757, ,658, , , , , , , ,362, ,483, ,488, ,217, ,153, The amount of 1,153, Euro, accounted for under Income accrual current, refers to interests from loans granted to subsidiary companies, which overdue during 2016 and are to be capitalised during 2017 (Note 14). Receivables 2015 Non-Current Current Companies Total Related Parties Granted Loans (Note 14) Trade Receivables (Note 15) Granted Loans (Note 14) Accruals and Deferrals Lisboagás GDL, 273,432, ,165, , , Lusitaniagás, S.A. 149,265, ,626, , , Setgás, S.A. 87,948, ,609, , , Duriensegás, S.A. 22,612, ,505, , , Medigás, S.A. 14,375, ,330, , , Dianagás, S.A. 10,280, ,212, , , Tagusgás, S.A. 5,412, ,008, , Paxgás, S.A. 4,677, ,658, , , Beiragás, S.A. 1,279, ,132, , , Galp Energia, SGPS, S.A. 145, , ,430, ,249, ,363, , ,671, Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

32 Regarding the amount of 1,671, Euro, accounted under Income accruals current, 1,208, Euro refer to interests from loans granted to subsidiary companies, which overdue during 2015 and were capitalised during 2016 and 463, Euro relates to services provided to subsidiary companies to be invoice in 2016 (Note 14). Payables 2016 Current Companies Total Related Parties Trade payables Loans obtained (Note 24) Payable Tax (Note 9) Accruals and deferrals Lisboagás GDL, S.A. 9,838, , ,318, , Galp Energia, SGPS, S.A. 1,382, ,382, Duriensegás, S.A. 941, , , , Galp Energia, S.A. 653, , , Medigás, S.A. 489, , Lusitaniagás, S.A. 203, , , Setgás, S.A. 142, , , GDP-Gás de Portugal, S.A. 132, , , Petrogal, S.A. 58, , , Beiragás, S.A. 41, , , Galp Gás Natural, S.A. 14, , , ,898, ,057, ,737, ,382, , Regarding the amount of 721, Euro, 177, Euro refers to external services and supplies to be invoiced to group companies and 543, Euro relates to productivity bonuses to be invoiced to subsidiary companies (Note 24). Payables 2015 Non-Current Current Companies Total Related Parties Loans Obtained (Note 24) Accruals and Deferrals (Note 24) Trade payables (Note 26) Loans Obtained (Note 24) Payable Tax (Note 9) Accruals and deferrals Galp Gas & Power,SGPS, SA 589,146, ,800, , ,315, Setgás, S.A. 44,239, , ,000, , Lisboagás GDL, S.A. 8,649, , ,071, , Medigás, S.A. 999, , Duriensegás, S.A. 976, , , , Galp Energia, S.G.P.S., S.A. 401, , Dianagás, S.A. 550, , Paxgás, S.A. 513, , Beiragás, S.A. 64, , , Galp Energia, S.A. 440, , , Lusitaniagás, S.A. 285, , , , Galp Gás Natural, S.A. 110, , (916.66) 42, Petrogal, S.A. 82, , , ,462, ,800, , , ,096, , ,112, Regarding the amount of 2,112, Euro, 1,299, Euro refers to overdue interest from loans obtained from Galp Gás & Power, SGPS, S.A. during 2015 which were paid in 2016 and 813, Euro related to productivity bonuses to be invoiced to subsidiary companies (Note 24). Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

33 Transactions 2016 Companies External Supplies and Services Personnel Costs Incurred Operating Income (Note 5) Personnel Costs Charged Financial Costs (Note 8) Financial Income (Note 8) Galp Gas & Power,S.G.P.S., SA (46,770.70) 20,716, Lisboagás GDL, S.A. 3,186, (7,355,819.34) (12,867,421.24) Lusitaniagás, S.A. 1,125, (1,123,057.40) (7,412,799.19) Setgás, S.A. 781, (559,123.19) (4,506,237.10) Duriensegás, S.A. 63, (282,924.14) (1,119,365.00) Galp Energia, S.A. 982, , Medigás, S.A. (224,298.60) (712,785.14) Dianagás, S.A. (489,794.71) (511,829.82) Tagusgás, S.A. (279,999.96) (60,000.00) (366,607.09) Beiragás, S.A. 214, (1,056,807.77) (36,000.00) (17,064.43) Petrogal, S.A. 98, , Paxgás, S.A. (110,617.90) (231,824.42) GDP-Gás de Portugal, S.A. 306, (86,403.76) Modelo Continente SA 135, Galp Gás Natural, S.A. (11,868.90) Galp Energia, SGPS, S.A. 1, Galp Energia España, S.A ,524, ,709, (11,482,443.01) (96,000.00) 20,716, (27,745,933.43) Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

34 Transactions 2015 Companies External Supplies and Services Personnel Costs Incurred Operating Income (Note 5) Financial Costs (Note 8) Financial Income (Note 8) Galp Gas & Power,SGPS, SA , ,37 Galp Energia, S.A , ,81 GDP-Gás de Portugal, S.A , ,00 Petrogal, S.A , ,08 Galp Energia, S.G.P.S., S.A ,58 Galp Energia España, S.A. 229,20 Galp Açores, S.A. 13,41 Paxgás, S.A. (69.111,35) ( ,19) Beiragás, S.A ,09 ( ,79) ( ,43) Tagusgás, S.A. (60.000,00) ( ,00) ( ,00) Medigás, S.A. ( ,09) ( ,94) Dianagás, S.A. ( ,70) ( ,34) Setgás, S.A ,42 ( ,78) ( ,61) Duriensegás, S.A ,63 ( ,90) ( ,31) Lusitaniagá, S.A ,78 ( ,90) ( ,99) Lisboagás GDL, S.A ,70 ( ,39) ( ,62) , ,66 ( ,90) ,95 ( ,43) 29. REMUNERATION OF THE BOARD The remuneration of the board members of GGND for the years ended 31 December 2016 and 2015 is detailed as follows: Base wage December 2016 Other charges and regularisations Total Board members Executive management 112, , , , , , DIVIDENDS In accordance with the deliberation of the General Meeting of Shareholders held on 4 May 2016, the Company distributed dividends to its shareholder Galp Gás & Power, SGPS, SA, amounting 8,521, Euro, regarding the net result of Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

35 31. OIL AND GAS RESERVES Not applicable. 32. FINANCIAL RISK MANAGEMENT Risk Management The Company is exposed to several types of market risks (price risk and interest rate risk) inherent to the natural gas industries, which affect the Company s financial results. Market risks Interest rate risk The total interest rate position is managed centrally. Interest rate exposure relates mainly to bank loans bearing interests. The purpose of managing interest rate risk is to reduce the volatility of financial costs in the income statement. The interest rate risk management policy aims to reduce exposure to variable rates fixing interest rate risk on loans, using simple derivatives such as swaps. Liquidity risk Liquidity risk is defined as the amount by which profit and/or cash flow of the business are affected as a result of the Company s constraint to obtain the financial resources necessary to meet its operating and investment commitments. The Company finances itself through cash flows generated by its operations and maintains a diversified portfolio of loans. The Company has access to credit amounts that are not fully used but that are at its disposal. These credits can cover all loans that are repayable in 12 months. The available short term lines of credit that are not being used are sufficient to meet any immediate demand. Credit risk Credit risk results from potential non-compliance by third parties of contractual obligations to pay and so the risk level depends on the financial credibility of the counterparty. In addition, counterparty credit risk exists on monetary investments and hedging instruments. Credit risk limits are established by Galp Energia Group and are implemented in the various business segments. The credit risk limits are defined and documented and credit limits for certain counterparties are based on their credit ratings, period of exposure and monetary amount of the exposure to credit risk. Impairment of Other receivables is analysed in the Notes 14 and 15. Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC

36 33. CONTINGENT ASSETS AND LIABILITIES Not applicable. 34. INFORMATION ON ENVIRONMENTAL MATTERS Not applicable. 35. SUBSEQUENT EVENTS Not applicable. 36. APPROVAL OF THE FINANCIAL STATEMENTS The financial statements were approved by the Board of Directors at March 30th EXPLANATION ADDED FOR TRANSLATION These financial statements are a free translation of the financial statements originally issued in Portuguese in accordance with International Financial Reporting Standards as adopted by the European Union (Note 2.1) some of which may not conform to generally accepted accounting principles in other countries. In the event of discrepancies, the Portuguese language version prevails. Share Capital: 89,129,141 Euro Registered in Conservatória do Registo Comercial de Lisboa NIPC